Nope, power line networking is not illegal. In New Jersey, there is a government funded test city for power-line networking and they are working to expand it to other cities. Recently, the FCC head was going on and on about how great it works in some journal. Also, it isn't very expensive to implement from the consumer side. The biggest problem with the tech today is "filtering"--- which is very similar to the issue that DSL providers face with the distance from digital switches.